IBM Pays $10 Million to Settle Long-Running Corruption Probe


After a seven-year investigation, IBM settled SEC charges that IBM had violated internal controls and books and records provisions of the Foreign Corrupt Practices Act. IBM agreed to disgorge $5.3 million and to pay a $2 million penalty and $2.7 million in prejudgment interest. IBM did not disclose the cost of the internal investigation, or whether the Department of Justice continues to investigate.

The SEC’s case included FCPA violations by IBM’s Chinese subsidiaries (“IBM-China”). IBM-China sold hardware, software, and other services to customers owned or controlled by the Chinese government. Those contracts sometimes called for IBM-China to provide offsite training to officials. IBM policies prohibited payment for side trips or stopovers unrelated to the training programs, and it required all travel to be pre-approved.

Please see full alert below for more information.

LOADING PDF: If there are any problems, click here to download the file.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Morrison & Foerster LLP | Attorney Advertising

Written by:


Morrison & Foerster LLP on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:

Sign up to create your digest using LinkedIn*

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.

Already signed up? Log in here

*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.